Addnode Group

Quarterly Report • Apr 26, 2019

INTERIM REPORT 1 JANUARY – 31 MARCH 2019

This is a translation of the Swedish original of Addnode Group's interim report for the period 1 january–31 march 2019. In the event of any discrepancies between the two versions, the original Swedish version shall take precedence.

FIRST QUARTER SUMMARY, JANUARY–MARCH 2019

• Net sales increased to SEK 858 m (737), representing growth of 16 per cent, of which 8 per cent was organic. The currency-adjusted organic growth was 5 per cent.
• EBITA increased to SEK 82 m (66), for an EBITA margin of 9.6 per cent (9.0).
• Operating profit increased to SEK 56 m (44), for an operating margin of 6.5 per cent (6.0).
• Profit after tax decreased to SEK 15 m (29). Excluding remeasurement of contingent earn-out payments of SEK -24 m (-), profit after tax increased to SEK 39 m (29).
• Earnings per share decreased to SEK 0.45 (0.95).
• Cash flow from operating activities increased to SEK 226 m (205).

SUMMARY OF SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD

• Acquisition of software company IntraPhone Solutions.
• Acquisition of KPASS IT, a partner of the French company Dassault Systèmes.
• Acquisition of British Autodesk business.

Growth EBITA Q1 2019 compared with Q1 2018

Net sales, April 2018 – March 2019  64 %  +24 %  3,063 SEK m

0 1

Q1

KEY FIGURES	2019	2018	2018
	Jan–March	Jan–March	Full year
Net sales, SEK m	858	737	2,942
EBITA, SEK m	82	66	298
EBITA margin, %	9.6	9.0	10.1
Operating profit, SEK m	56	44	203
Operating margin, %	6.5	6.0	6.9
Profit for the period, SEK m	15	29	152
Earnings per share, SEK	0.45	0.95	4.75
Cash flow from operating activities, SEK m	226	205	285
Return on shareholders' equity*, %	11.4	9.2	13.1
Return on capital employed*, %	10.5	9.6	12.3
Shareholders' equity per share, SEK	41.22	34.24	40.06

* Key ratios have been adjusted to reflect returns on a yearly basis.

For more information, please contact:

Johan Andersson, President and CEO johan.andersson@addnodegroup.com +46 (0) 704 20 58 31 Helena Nathhorst, CFO helena.nathhorst@addnodegroup.com +46 (0)70 607 63 23

All amounts are presented in millions of Swedish kronor (SEK m) unless indicated otherwise. Rounding differences of SEK +/- 1 m may occur in the summing of figures. In cases where an underlying figure is SEK 0 m when rounded, it will be presented as 0.

Net sales increased by 16 per cent in Q1 2019. The share of recurring revenue rose to 64% (59) and the EBITA margin improved from 9.0 to 9.6 per cent.

A VERY GOOD START TO 2019

We begin 2019 with yet another record-quarter. In spite of the tough comparison with last year's outcome growth during the quarter is 16 per cent, of which 8 per cent is organic. We have improved the EBITA margin and delivered a strong cash flow. Our business model, with a large share of customer advances for yearly maintenance agreements, gives a very strong cash flow during the first quarter.

GOOD ORGANIC GROWTH

The Design Management division has historically had a strong first quarter, and such was the case this year with growth of 29 per cent driven by good organic growth and growth for the recently acquired company Cadassist. We have won new business and customers in the design and BIM areas, especially in Norway and the UK. Our SaaS solutions for management of construction and infrastructure projects continue to be in high demand.

Division Product Lifecycle Management has had a good organic growth during the first quarter and the acquisitions made during 2018 has developed according to plan. We have both extended current and won new business regarding design, simulation and PLM-projects in the Nordics, the Netherlands and the UK.

Division Product Lifecycle Management has had a stable developement. We have ended more consultingoriented assignments with lower profitability and have won new business from public sector customers in case management and e-services. We are leveraging much more of our relationships with Swedish municipalities as they see that we can offer a more integrated digital flow for their processes.

ACQUISITIONS

An important part of Addnode Group's growth is our ability to carry out value-creating acquisitions. The majority of our acquisitions are entrepreneurs with businesses that complement our existing offerings and who want to continue being active in their companies' future development with us. Several of our acquisitions developed during 2018 even more positive than expected, which meant that reservations for contingent earn-out payments

has been too low and has burdened net financial items by SEK -24 m during the quarter. After the end of the reporting period we have carried out three acquisitions with combined annual sales of approximately SEK 110 m. We are continuously engaged in acquisition talks that may lead to deals in 2019.

LONG-TERM DRIVERS

The fundamental drivers behind our business stem mainly from major societal trends, such as urbanisation, digitalisation, automation and increasing demands for sustainable development in private industry as well as in public administration. We help our customers with innovative, digital solutions that result in enduring competitive advantages, better communication and more efficient operations. Our stable financial position gives us the opportunity to invest in new digital solutions and acquisitions, which create long-term profitable growth.

Johan Andersson President and CEO

SIGNIFICANT EVENTS

AFTER THE END OF THE REPORTING PERIOD Acquisition of software company IntraPhone Solutions

IntraPhone Solutions AB develops mobile IT solutions for planning and monitoring home care services, which are used by more than 45 municipalities across Sweden. The company has annual net sales of approximately SEK 35 m. Transfer of possession took place on 1 April 2019, and the company will be part of the Process Management division.

Acquisition of Dassault Systèmes partner KPASS IT

KPASS, with 35 employees in France and Japan, is a service partner for Dassault Systèmes' 3DEXPERIENCE Platform with experience from global projects in the energy, automotive, aerospace and defence sectors. The company, with annual net sales of approximately SEK 39 m, will be consolidated as from April 2019 in the Product Lifecycle Management division.

Acquisition of British Autodesk business

Addnode Group's subsidiary Symetri Ltd has acquired the British IT company Majenta's Autodesk activities, with annual net sales of approximately SEK 40 m. The acquisition further extends Symetri's reach in the UK market and is in line with the strategy to be an international marketleading provider of software and services for design and engineering activities.

ADDNODE GROUP IN BRIEF

Addnode Group is an international information technology company with 1,600 employees in 19 countries. In close collaboration with our customers we create digital solutions that make use of software and services to build a more sustainable society. Our customers use our digital solutions to design, build and manage products, properties and infrastructure. In the public sector our digital solutions enable efficient administration and communication with citizens.

VISION

A digitally sustainable society in which people, companies, authorities and organisations interact with the technology that surrounds us.

MISSION

Addnode Group acquires, operates and develops entrepreneur-driven companies that help digitalise society.

We take long-term responsibility for the software and services that we provide, which creates value and stability for our customers and profitability for the Group.

BUSINESS MODEL

We provide software and services with a high level of recurring revenue from support, maintenance, subscription and SaaS solutions.

FINANCIAL TARGETS

We aim for annual growth in net sales of at least 10 per cent. Our operating margin before amortisation and impairment of intangible assets (EBITA margin) shall amount to at least 10 per cent. At least 50 per cent of consolidated profit after tax shall be distributed to the shareholders, provided that net cash is sufficient to operate and develop the business.

2019

half of 2019

CONSOLIDATED NET SALES AND EARNINGS

FIRST QUARTER, JANUARY–MARCH 2019

Net sales amounted to SEK 858 m (737), representing growth of 16 per cent, of which 8 per cent was organic. Currency-adjusted organic growth was 5 per cent. Licence revenue amounted to SEK 50 m (51), recurring revenue increased to SEK 545 m (436), service revenue increased to SEK 254 m (235), and other revenue totalled SEK 9 m (15). Compared with the corresponding quarter a year ago, recurring revenue increased from 59 per cent to 64 per cent, mainly in the Design Management division, but also in the PLM division. EBITA increased to SEK 82 m (66), for an EBITA margin of 9.6 per cent (9.0).

Cash flow from operating activities amounted to SEK 226 m (205). The strong cash flow is mainly attributable to a large share of advance payments for maintenance agreements during the quarter. Net financial items amounted to SEK -30 m (-5). The Group's net financial items were burdened affected by SEK -24 m (-) pertaining to remeasurements of contingent earn-out payments mainly for companies in the UK. Reported tax on profit for the period was SEK -11 m (-10), and profit after tax was SEK 15 m (29). Excluding the remeasurement of contingent earnout payments, profit after tax increased to SEK 39 m (29). Earnings per share after dilution were SEK 0.45 (0.95).

BREAKDOWN OF REVENUE, Q1 2019

DEVELOPMENT PER DIVISION

NET SALES AND EBITA, Q1

		Net sales			EBITA
SEK m	2019 Q1	2018 Q1	Change %	2019 Q1	2018 Q1	Change %
Design Management	370	287	+29	43	26	+65
Product Lifecycle Management	292	252	+16	19	15	+27
Process Management	201	201	0	30	35	-14
Eliminations/Central costs	-5	-3		-10	-9
Addnode Group	858	737	+16	82	66	+24

DIVISIONS

Addnode Group's operations are organised and managed based on the Design Management, Product Lifecycle Management (PLM) and Process Management divisions, which make up the Group's operating segments.

Within Addnode Group's three divisions, the subsidiaries provide software and digital solutions to a range of sectors, including construction, real estate, manufacturing industry, automotive, life sciences and the public sector. The solutions help companies and public authorities improve efficiency in everything from case management and citizen dialogues to design, construction and management of product data throughout a product's entire lifecycle.

There have been no changes in the segment division or calculation of segment results since the most recently published annual report.

IFRS 16 is not applied in the segment reporting. In other respects, the segments are reported in accordance with the same accounting policies as the Group.

The difference between the sum of the segments' operating profits and consolidated profit before tax pertains to financial income of SEK 1 m (1), financial expenses of SEK -7 m (-6), and remeasurement of contingent earn-out payments of SEK -24 m (-). There have been no significant changes in the segments' assets compared to the information in the most recent annual report.

SEASONAL VARIATIONS

Net sales and EBITA have historically been highest during the fourth quarter.

DIVISION DESIGN MANAGEMENT

Software and digital solutions for design and BIM for engineers and architects in the construction and real estate sectors, manufacturing industries and the marine industry. The division also has a strong offering for project collaborations, property management and facility management

QUARTERLY DEVELOPMENT

Net sales increased to SEK 370 m (287) during the first quarter, representing growth of 29 per cent. Organic growth was 13 per cent, and adjusted for currency effects, organic growth was 10 per cent. EBITA increased to SEK 43 m (26), for an EBITA margin of 11.6 per cent (9.1). We won new business and customers in the design and BIM areas, especially in the Nordic region and the UK. Demand for Autodesk products combined with our own add-on products was very good. Our SaaS solutions for construction and infrastructure projects met continued favourable demand. The acquisition of Cadassist during the third quarter of 2018 contributed to both the sales and earnings growth.

NEW BUSINESS

The division secured agreements from customers such as James Howden, Jotun, Leo Pharma, LPO Arkitekter, Meyer Turku and Multiconsult Norge.

MARKET

The division is one of Europe's leading suppliers of design and BIM software to the construction and manufacturing industries and has a strong offering for project collaboration and property management. Customers' willingness to invest is driven by the need to develop and design new products, manage them and conduct efficient construction processes.

NET SALES Q1 2019, BY TYPE OF REVENUE

Licenses, 2% Recurring revenue, 81%

• Services, 16%
• Other, 1%

EBITA Q1 2019 COMPARED WITH Q1 2018

+65%

KEY FIGURES

SEK m	Q1 2019	Q1 2018	Change %
Net sales	370	287	29
EBITA	43	26	65
EBITA-margin, %	11.6	9.1
Operating profit	32	16	100
Operating margin, %	8.6	5.6
Average no. employees	419	412	2

DIVISION PRODUCT LIFECYCLE MANAGEMENT

Software and digital solutions and services for developing and managing consumer and industrial products during their entire lifecycles, from idea, design, simulation and construction to sale, aftermarket and recycling.

QUARTERLY DEVELOPMENT

Net sales increased to SEK 292 m (252) during the first quarter, representing growth of 16 per cent. Organic growth was 9 per cent. Adjusted for currency effects, organic growth was 5 per cent. EBITA amounted to SEK 19 m (15), for an EBITA margin of 6.5 per cent (6.0). Demand and sales remained favourable, with positive development in the Nordic countries, Benelux and the UK. Capacity utilisation was favourable for the delivery organisation, and recurring revenue increased. As a result of completed acquisitions, the division has established a position in several geographic markets and has become an even stronger, world-leading partner to Dassault Systèmes, which has attracted greater interest from larger customers with global organisations.

NEW BUSINESS

The division secured agreements with customers such Arla Foods, Geberit, Husqvarna, Koeningsegg, Lehto Group, LightYear, National Composites Centre, Reflection Marine, Stadler Rail and Vanderlande Industries.

MARKET

The division's operations are conducted in the subsidiary TECHNIA, one of Europe's leading suppliers of PLM software and consulting services in a growing global market. Customers' willingness to invest is driven by a need to develop and design new products, manage them, and comply with authorities' requirements.

NET SALES Q1 2019, BY TYPE OF REVENUE

Licences, 12% Recurring revenue, 58%

• Services, 30%
• Other, 0%

EBITA Q1 2019 COMPARED WITH Q1 2018

KEY FIGURES

SEK m	Q1 2019	Q1 2018	Change %
Net sales	292	252	16
EBITA	19	15	27
EBITA-margin, %	6.5	6.0
Operating profit	12	9	33
Operating margin, %	4.1	3.6
Average no. employees	596	543	10

DIVISION PROCESS MANAGEMENT

Software and digital solutions for document and case management, e-archives, information management and citizen dialogues for the public sector and private customers with similar needs.

QUARTERLY DEVELOPMENT

Net sales increased to SEK 201 m (201) during the first quarter, representing growth of zero per cent. Organic growth was -1 per cent. Adjusted for currency effects, organic growth was -1 per cent. EBITA amounted to SEK 30 m (35), for an EBITA margin of 14.9 per cent (17.4). The general business climate for the division remains stable, and the year-on-year comparison should take into account a very strong quarter a year ago. Above all, demand was favourable for document and case management, e-archives and citizen services. Capacity utilisation in the division's delivery organisations was good during the quarter. Completed acquisitions in 2018 made a positive contribution to earnings.

NEW BUSINESS

The division secured agreements with customers such as Kungsbacka Municipality, Malmö Municipality, the Swedish Environmental Protection Agency, SAAB, Skanska, Södertälje Municipality and the Swedish Transportation Administration.

MARKET

The willingness to invest in digitalisation of operations in the public sector in Sweden is strong. A growing number of authorities and municipalities are looking for a longterm partner in their work on developing innovative and efficient operations that are in conformity with the rule of law.

NET SALES Q1 2019, BY TYPE OF REVENUE

Licences 4%

• Recurring revenue, 38%
• Services, 55%
• Other, 3%

EBITA Q1 2019 COMPARED WITH Q1 2018

KEY FIGURES

SEK m	Q1 2019	Q1 2018	Change %
Net sales	201	201	0
EBITA	30	35	-14
EBITA-margin, %	14.9	17.4
Operating profit	22	28	-21
Operating margin, %	10.9	13.9
Average no. employees	501	491	2

CONSOLIDATED BALANCE SHEET AND CASH FLOW

LIQUIDITY AND FINANCIAL POSITION

The Group's available liquidity amounted to SEK 653 m. This includes, in addition to cash and cash equivalents of SEK 553 m (384), an unutilised bank overdraft facility of SEK 100 m. In addition, the Group has a multi-currency revolving credit facility of up to SEK 750 m to finance acquisitions, of which SEK 177 m was unutilised as per 31 March 2019. Liabilities pertaining to promissory notes for completed acquisitions amounted to SEK 30 m (35) , and estimated contingent earn-out payments for completed company acquisitions amounted to SEK 58 m (107) . Liabilities for estimated contingent earn-outs increased by SEK 22 m in connection with remeasurements conducted in 2019. The Group's interest-bearing liabilities amounted to SEK 748 m (700) as per 31 March 2019, of which lease liabilities according to IFRS 16 amounted to SEK 130 m. Within the framework of existing credit facilities, new bank loans of SEK 68 m were taken out, and amortisation of bank loans totalled SEK 20 m during the first quarter of 2019. Net debt amounted to SEK 195 m (316). The equity/assets ratio was 40 per cent (36) on 31 March 2019.

CASH FLOW

Cash flow from operating activities amounted to SEK 226 m (205) during the first quarter of 2019. The good cash flow is largely attributable to advance payments from customers for support and maintenance contracts. Cash flow from investing activities in 2019 includes payments of SEK 90 m for contracted and previously expensed earn-out payments for company acquisitions carried out in previous years. It also includes payments of SEK 12 m (14) for proprietary software. The proposed share dividend is expected to entail an outgoing payment of SEK 84 m in May 2019.

INVESTMENTS

Investments in intangible non-current assets and in property, plant and equipment amounted to SEK 19 m (18), of which SEK 12 m (14) pertains to proprietary software and SEK 6 m (3) to equipment.

GOODWILL AND OTHER INTANGIBLE ASSETS

The Group's carrying amount of goodwill on 31 March 2019 was SEK 1,531 m (1,447). Other intangible assets amounted to SEK 304 m (312) and pertain mainly to customer contracts and software.

DEFERRED TAX ASSETS

Total reported deferred tax assets amounted to SEK 10 m on 31 March 2019, of which SEK 7 m pertains to tax loss carryforwards. The Group's accumulated tax loss carryforwards amounted to approximately SEK 65 m on 31 March 2019. Deferred tax assets attributable to tax loss carryforwards are reported as assets to the extent it is likely that the loss carryforwards can be offset against surpluses in future taxation.

SHAREHOLDERS' EQUITY AND NUMBER OF SHARES

Shareholders' equity on 31 March 2019 amounted to SEK 1,378 m (1,041), corresponding to SEK 41.22 (34.24) per share outstanding. The Board of Directors has proposed that the Annual General Meeting approve a total share dividend of SEK 84 m. No share-savings, option or convertible programmes were outstanding as per 31 March 2019.

EMPLOYEES

The average number of employees in the Group during the first quarter of 2019 was 1,524 (1,453). The number of employees at the end of the period was 1,606 (1,538 as per 31/12/2018).

DISCLOSURES OF ACQUISITIONS

Addnode Group acquired two companies after the end of the reporting period and one assets acquisition.

On 1 April all of the shares were acquired in the software company IntraPhone Solutions AB. The business is focused on mobile IT solutions for planning and monitoring home care services, which are used by more than 45 municipalities across Sweden. The acquisition strengthens the Group's offering in the Swedish care and public assistance market. The company has net sales of approximately SEK 35 m and is consolidated in the Process Management division as from 1 April 2019.

On 4 April all of the shares were acquired in the company KPASS IT, a French IT specialist with annual net sales of approximately SEK 39 m. KPASS IT has 35 employees and is consolidated in the Product Lifecycle Management division as from April 2019. The acquisition further strengthens the division's offering to customers in the PLM area by establishing operations in France and Japan.

On 5 April Addnode Group's subsidiary Symetri Ltd acquired the British IT company Majenta's Autodesk activities, with annual net sales of approximately SEK 40 m. The acquisition further extends Symetri's reach in the UK market and is in line with the strategy to be an international market-leading provider of software and services for design and engineering activities.

DISCLOSURES OF FINANCIAL INSTRUMENTS

Measurement of financial assets and liabilities shows that there is no significant difference between their carrying amounts and fair value. The Group had no outstanding currency forward contracts as per 31 March 2019.

RELATED PARTY TRANSACTIONS

The Chairman of the Board, Staffan Hanstorp, has via companies invoiced the Parent Company SEK 0.8 m in fees for consulting services associated with the Group's acquisition opportunities, financing matters, strategic partnerships and overarching strategic matters during the period January – March 2019.

PARENT COMPANY

Net sales amounted to SEK 2 m (1) during the first quarter of 2019, which pertains mainly to invoicing to subsidiaries for rents of premises and performed services. Profit after financial items totalled SEK 14 m (-18) including SEK 33 m (-) in dividends from subsidiaries. Cash and cash equivalents amounted to SEK 370 m on 31 March 2019 (144). Investments pertaining to shares in subsidiaries amounted to SEK 28 m. No significant investments have been made in intangible non-current assets or in property, plant and equipment. The proposed share dividend is expected to entail an outgoing payment of SEK 84 m in May 2019. Provisions for estimated contingent earn-out payments have increased by SEK 22 m in connection with remeasurements conducted in 2019, and provisions for contingent earn-out payments for company acquisitions carried out in previous years amounted to SEK 78 m.

ACCOUNTING POLICIES

This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting. The consolidated accounts have been prepared in accordance with the International Financial Reporting Standards (IFRS) as endorsed by the EU and the Swedish Annual Accounts Act. The Parent Company's accounts have been prepared in accordance with the Annual Accounts Act and recommendation RFR 2 Accounting for Legal Entities.

IFRS 16 Leases is applied prospectively as from 1 January 2019, i.e., comparison figures are not recalculated. The Group's leases pertain mainly to leases of office premises and company cars. Right-of-use assets are assigned the same value as the calculated lease liability as per 1 January 2019. As per the transition date, property, plant and equipment increase by SEK 139 m, and interest-bearing liabilities increase by SEK 131 m. The Group's equity is not affected by the transition to IFRS 16.

The other new standards, amendments and interpretations of existing standards that became effective in 2019 have not had any impact on the Group's financial position or the financial statements. Apart from implementation of IFRS 16, the accounting policies and calculation methods are unchanged compared with the description in the 2018 Annual Report,

SIGNIFICANT RISKS AND UNCERTAINTIES

Addnode Group's significant risks and uncertainties are described in the 2018 Annual Report on pages 46 – 47 and in the section "Risks and uncertainties" on page 62, as well as in notes 39 and 40 on pages 112 – 115. No significant changes have subsequently taken place.

FUTURE OUTLOOK

The Board has not changed its assessment of the future outlook compared with the preceding quarter. In the yearend report for 2018 the Board communicated the following outlook: In the long-term, the areas in which Addnode Group is active are deemed to have strong underlying potential. Addnode Group's growth strategy is to grow organically and through acquisitions of new businesses in the aim of adding new, complementary offerings and additional expertise. The policy of not issuing a forecast stands firm.

Stockholm, 26 April 2019

The Board of Directors

This interim report has not been reviewed by the company's auditors.

CONSOLIDATED FINANCIAL REPORTS

CONSOLIDATED INCOME STATEMENT

SEK m	2019 Jan–March	2018 Jan–March	2018 Full year
Net sales	858	737	2,942
Purchases of goods and services	-367	-292	-1,112
Other external costs	-70*	-79	-339
Personnel costs	-331	-310	-1,229
Capitalized work performed by the company for its own use	12	14	52
Depreciation/amortization and impairment of
- tangible fixed assets	-20*	-4	-16
- intangible fixed assets	-26	-23	-95
Operating profit	56	44	203
Financial income	1	1	5
Financial expenses	-7*	-6	-17
Remeasurements of contingent earn-out payments	-24	-	6
Profit before taxes	26	38	197
Current tax	-13	-11	-50
Deferred tax	2	1	5
Net profit for the period	15	29	152
Attributable to:
Owners of the Parent Company	15	29	152
Share data
Earnings per share before and after dilution, SEK	0.45	0.95	4.75
Average number of shares outstanding:
Before and after dilution	33,427,256	30,427,256	32,018,923

* Other external costs are reduced by SEK 16 m, depreciation of tangible fixed assets increases by SEK 16 m and financial expenses increase by SEK 1 m due to IFRS 16 "Leases".

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

SEK m	2019 Jan–March	2018 Jan–March	2018 Full year
Net profit for the period	15	29	152
Other comprehensive income, items that will not be reclassified to the consolidated income statement:
Actuarial gains and losses on pension obligations	-	-	0
Other comprehensive income, items that may be reclassified to the consolidated income statement:
Exchange rate difference upon translation of foreign operations	62	57	25
Hedge of net investments in foreign operations	-38	-27	-6
Total other comprehensive income after tax for the period	24	30	19
Comprehensive income for the period	39	59	171
Attributable to:
Owners of the Parent Company	39	59	171

CONSOLIDATED BALANCE SHEET

SEK m	2019 31 March	2018 31 March	2018 31 Dec
Assets
Goodwill	1,531	1,447	1,495
Other intangible fixed assets	304	312	308
Tangible fixed assets	176*	39	37
Financial assets	29	28	28
Total non-current assets	2,040	1,826	1,868
Inventories	1	1	1
Current receivables	811	718	819
Cash and cash equivalents	553	384	387
Total current assets	1,365	1,103	1,207
Total assets	3,405	2,930	3,075
Shareholders' equity and liabilities
Shareholders' equity	1,378	1,041	1,339
Non-current liabilities	163	155	93
Current liabilities	1,864	1,735	1,643
Total shareholders' equity and liabilities	3,405	2,930	3,075
Interest-bearing receivables amount to	0	0	0
Interest-bearing liabilities amount to	748*	700	545
Pledged assets	6	8	6
Contingent liabilities	1	1	1

* Tangible fixed assets increase by SEK 139 m and the interest-bearing debt increases by SEK 130 m due to IFRS 16 "Leases".

SHAREHOLDERS' EQUITY AND NUMBER OF SHARES

Specification of changes in shareholders' equity	2019 Jan–March	2018 Jan–March	2018 Full year
Shareholders' equity, opening balance	1,339	982	982
New share issue	-	-	258
Issue expenses	-	-	-4
Dividend	-	-	-69
Comprehensive income for the period	39	59	171
Shareholders' equity, closing balance	1,378	1,041	1,339
Shareholders' equity attributable to:
Owners of the Parent Company	1,378	1,041	1,339
Specification of number of shares outstanding
Number of shares outstanding, opening balance	33,427,256	30,427,256	30,427,256
New share issue	-	-	3,000,000
Number of shares outstanding, closing balance	33,427,256	30,427,256	33,427,256

Addnode Group had no holdings of treasury shares on 31 December 2018 nor 31 March 2019.

CONSOLIDATED CASH FLOW STATEMENTS

SEK m	2019 Jan–March	2018 Jan–March	2018 Full year
Operating activities
Operating profit	56	44	203
Adjustment for non-cash items	43*	21	109
Total	99	65	312
Net financial items	-6	-3	-13
Tax paid, etc.	-20	-13	-56
Cash flow from operating activities before changes in working capital	73	49	243
Total change in working capital	153	156	42
Cash flow from operating activities	226	205	285
Investing activities
Purchases and sales of intangible and tangible fixed assets	-18	-15	-65
Acquisition of financial fixed assets	-	-	-3
Acquisition of subsidiaries and operations	-90	-50	-212
Cash and cash equivalents in acquired companies	-	13	114
Repayment of receivables	-	-	0
Cash flow from investing activities	-108	-52	-166
Financing activities
Paid dividend	-	-	-68
New share issue	-	-	254
Borrowings	68	42	117
Repayment of loans	-36*	-1	-213
Cash flow from financing activities	32	41	90
Change in cash and cash equivalents	150	194	209
Cash and cash equivalents at start of period	387	173	173
Exchange rate difference in cash and cash equivalents	16	17	5
Cash and cash equivalents at end of period	553	384	387

* Adjustments for items not included in the cash flow include a positive effect of SEK 16 m from amortization of tangible fixed assets and amortization of liabilities increases by SEK 16 m due to IFRS 16 "Leases".

PARENT COMPANY FINANCIAL REPORTS

PARENT COMPANY INCOME STATEMENT

SEK m	2019 Jan–March	2018 Jan–March	2018 Full year
Net sales	2	1	15
Operating expenses	-14	-12	-49
Operating profit	-12	-11	-34
Financial income	33	1	158
Financial expenses	-7	-8	-18
Profit after financial items	14	-18	106
Transfer to tax allocation reserve	-	-	-19
Profit before taxes	14	-18	87
Tax	-	-	-14
Net profit for the period	14	-18	73

PARENT COMPANY BALANCE SHEET

SEK m	2019 31 March	2018 31 March	2018 31 Dec
Assets
Intangible fixed assets	1	1	1
Financial fixed assets	2,022	1,835	1,994
Current receivables	84	74	74
Cash and cash equivalents	370	144	188
Total assets	2,477	2,054	2,257
Shareholders' equity and liabilities
Shareholders' equity	1,127	836	1,113
Untaxed reserves	50	31	50
Provisions	53	98	102
Non-current liabilities	-	11	-
Current liabilities	1,247	1,078	992
Total shareholders' equity and liabilities	2,477	2,054	2,257

OPERATING SEGMENTS

The figures below refer to the first quarter of each full-year.

REVENUE AND PROFIT

		Design		PLM		Process		Central		Eliminations		Addnode Group
SEK m	2019	2018	2019	2018	2019	2018	2019	2018	2019	2018	2019	2018
Revenue
External sales	369	287	292	252	197	199	0	0	-	-	858	737
Transactions between segments	1	1	0	0	4	2	1	1	-6	-4	0	0
Total revenue	370	287	292	252	201	201	1	1	-6	-4	858	737
EBITA	43	26	19	15	30	35	-10	-9			82	66
EBITA margin	11.6	9.1	6.5	6.0	14.9	17.4					9.6	9.0
Operating profit	32	16	12	9	22	28	-10	-9			56	44
Operating margin	8.6	5.6	4.1	3.6	10.9	13.9					6.5	6.0
Average number of employees	419	412	596	543	501	491	8	7			1,524	1,453

REVENUE DISTRIBUTION
		Design		PLM	Process		Central		Eliminations		Addnode Group
SEK m	2019	2018	2019	2018	2019	2018	2019	2018	2019	2018	2019	2018
Licences	7	13	34	30	9	8	-	-	-	-	50	51
Recurring revenue	302	216	169	143	76	79	-	-	-2	-2	545	436
Services	58	50	87	77	110	108	-	-	-1	-	254	235
Other	3	8	2	2	6	6	1	1	-3	-2	9	15
Total revenue	370	287	292	252	201	201	1	1	-6	-4	858	737

KEY FIGURES – QUARTERLY

	2019				2018	2017
SEK m	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Net sales, SEK m	858	840	648	717	737	778	535	588	619
Design Management	370	303	218	245	287	277	173	209	247
Product Lifecycle Management	292	331	264	285	252	304	213	205	198
Process Management	201	211	169	192	201	202	151	176	176
EBITA, SEK m	82	105	65	62	66	102	25	33	52
Design Management	43	44	24	20	26	31	12	13	20
Product Lifecycle Management	19	39	25	25	15	41	8	11	12
Process Management	30	33	24	24	35	38	18	18	28
EBITA-margin, %	9.6	12.5	10.0	8.6	9.0	13.1	4.7	5.6	8.4
Design Management	11.6	14.5	11.0	8.2	9.1	11.1	7.1	6.1	8.2
Product Lifecycle Management	6.5	11.8	9.5	8.8	6.0	13.6	3.7	5.1	6.1
Process Management	14.9	15.6	14.2	12.5	17.4	18.8	11.7	10.4	15.8
Average number of employees	1,524	1,496	1,467	1,447	1,453	1,420	1,358	1,266	1,222
Design Management	419	417	407	407	412	391	367	317	309
Product Lifecycle Management	596	570	555	538	543	544	526	498	460
Process Management	501	501	498	495	491	477	458	443	445
Net sales per employee, SEK 000s	563	561	442	496	507	548	394	464	507
Change in net sales, %	16	8	21	22	19	18	14	11	15
EBITA margin, %	6.5	9.5	6.2	5.4	6.0	9.9	0.6	2.6	5.8
Equity, SEK m	1,378	1,339	1,288	1,270	1,041	982	923	924	986
Return on shareholders' equity,% *	11.4	13.1	12.7	10.3	9.2	9.4	7.8	9.7	9.9
Equity/assets ratio, %	40	44	45	42	36	37	38	47	47
Return on capital employed, %*	10.5	12.3	12.2	10.8	9.6	10.0	7.8	11.5	11.6
Net debt, SEK m	195	158	242	118	316	448	409	87	-66
Investments in equipment, SEK m	6	4	2	5	3	7	2	4	3

* Key figures have been calculated on the last twelve-month period.

SHARE DATA

	2019	2018
	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Average number of shares outstanding after dilution, millions	33.4	33.4	33.4	30.8	30.4	30.4	30.4	30.4	30.4
Total number of shares outstanding, millions	33.4	33.4	33.4	33.4	30.4	30.4	30.4	30.4	30.4
Total number of registered shares, millions	33.4	33.4	33.4	33.4	30.4	30.4	30.4	30.4	30.4
Earnings per share after dilution, SEK	0.45	2.00	0.84	0.91	0.95	1.81	0.03	0.26	0.85
Cash flow per share, SEK	6.76	3.41	-1.82	0.88	6.74	2.14	-2.59	-0.66	5.92
Shareholders' equity per share, SEK	41.22	40.06	38.53	38.02	34.24	32.30	30.39	30.39	32.43
Share price at end of period, SEK	132.00	103.50	116.00	89.40	77.60	75.75	80.50	80.25	67.25
Share price/shareholders' equity	3.20	2.58	3.01	2.35	2.27	2.35	2.65	2.64	2.07

ALTERNATIVE PERFORMANCE MEASURES USE AND RECONCILIATION

Guidelines for information about Alternative Performance Measures (APM) for companies with securities listed on a regulated market within EU have been issued by the European Securities and Markets Authority (ESMA) and shall be applied for alternative performance measures in published compulsory information. Alternative performance measures refer to financial measures regarding historical or future development of result, financial position, financial result or cash-flow which are not defined or stated in applicable rules for financial reporting. In the interim-report, some performance measures are used, which are not defined in IFRS, with the purpose to give investors, analysts and other interested parties clear-out and relevant information about the company's operations and development. The use of these performance measures and reconciliation to the financial statements is presented below.

Definitions are stated on page 18.

EBITA

EBITA is a measure which the group consider as relevant for investors, analysts and other interested parties in order to understand the development of the result before investments in intangible fixed assets. The measure is an expression for operating profit before amortization and impairment of intangible fixed assets.

NET DEBT

The group consider the key-ratio as useful for the users of the financial statements as a complement in order to evaluate the possibilities for dividend, to execute strategical investments and to evaluate the group's possibilities to comply with financial commitments. The key-ratio is an expression for the level of financial borrowing in absolute amount with deduction of cash and cash equivalents.

RECONCILIATION OF EBITA
	2019 Jan–March	2018 Jan–March	2018 Full year
Operating profit	56	44	203
Amortization and impairment of intangible fixed assets	26	23	95
EBITA	82	66	298

RECONCILIATION OF NET DEBT
----------------------------	--

	2019 31 March	2018 31 March	2018 31 Dec
Non-current liabilities	163	155	93
Current liabilities	1,864	1,735	1,643
Non interest-bearing non-current and current liabilities	-1,279	-1,190	-1,191
Total interest-bearing liabilities	748	700	545
Cash and cash equivalents	-553	-384	-387
Other interest-bearing receivables	0	0	0
Net debt (+)/receivables (-)	195	316	158

Q4

DEFINITIONS

Average number of employees

Average number of full-time employees during the period.

Capital employed

Total assets less noninterest-bearing liabilities and noninterestbearing provisions including deferred tax liabilities.

Cash flow per share

Cash flow from operating activities divided by the average number of shares outstanding.

Currency-adjusted organic growth

Change in net sales, recalculated with previous year's exchange rate, excluding acquired units during the last twelve-month period.

Earnings per share

Net profit for the period divided by the average number of shares outstanding.

EBITA

Earnings before amortisation and impairment of intangible non-current assets.

EBITA margin

EBITA as a percentage of net sales.

Equity/assets ratio

Shareholders' equity as a percentage of total assets.

Net debt

Interest-bearing liabilities less cash and cash equivalents and other interestbearing receivables. According to this definition, a negative level of net debt means that cash and cash equivalents and other interest-bearing financial assets exceed interest-bearing liabilities.

Net sales per employee

Net sales divided by the average number of employees (fulltime equivalents).

Operating margin

Operating profit as a percentage of net sales.

Organic growth

Change in net sales excluding acquired entities during the last twelve-month period.

Profit margin

Profit before tax as a percentage of net sales.

Recurring revenue

Revenue of an annually recurring character, such as revenue from support and maintenance contracts and revenue from subscription agreements, rental contracts and SaaS solutions for software.

Return on capital employed

Profit before tax plus financial expenses as a percentage of the average capital employed. Is based on the profit for the last 12-months and the average of opening and closing balance of capital employed.

Return on shareholder's equity

Net profit for the period attributable as a percentage of average shareholders' equity. Is based on the profit for the last 12-months and the average of opening and closing balance of shareholders' equity.

Share price/shareholder's equity

Share price in relation to shareholders' equity per share.

Shareholder's equity

Reported shareholders' equity plus untaxed reserves less deferred tax at the current tax rate.

Shareholder's equity per share

Shareholders' equity divided by the total number of shares outstanding.

This information is inside information that Addnode Group AB (publ) is obligated to make public pursuant to the EU Market Abuse Regulation. This report has been prepared in both a Swedish and an English version. In the case of variations between the two, the Swedish version shall apply. The information was submitted for publication at 08.30 a.m. CEST on 26 April 2019. This interim report has not been reviewed by the company's auditors.

ADDNODE GROUP AB (publ.)

Hudiksvallsgatan 4B, SE-113 30 Stockholm

Corporate identity number: 556291-3185 Phone: +46 (0)8 630 70 70 info@addnodegroup.com www.addnodegroup.com